Growth Effects of Institutional Change and European Integration

The economic integration between Eastern and Western Europe has increased considerably in the last years. Given this market-induced development, why should it be necessary to advance institutional integration? This paper argues that Central and Eastern European countries (CEECs) can enhance their economic growth prospects through EU?induced institutional change. Based on a macroeconomic production function accounting for institutional reform, the paper derives an estimate of the potential impact of the CEECs' accession to the EU institutional framework on growth in the CEECs